LAVALLETTE - Alli O'Neill, the owner of Colonial Bakery, crunched some numbers recently on the impact of a $15-an-hour minimum wage and came to a grim conclusion.

She will need to raise the price of a dozen doughnuts from $11 to $21 to maintain her current profit margin.

Alli O'Neill, owner of Colonial Bakery in Lavallette, says the increase in the minimum wage will force her to raise prices.(Photo: Michael L. Diamond)

"It’s not like I’m taking home so much that I can take it out of my pocket," O'Neill said Thursday morning. "I wish I could. I think there are big businesses out there that can do that. But the small businesses can’t."

As the New Jersey Legislature sent Gov. Phil Murphy a bill on Thursday that would increase the state's minimum wage to $15 an hour, Jersey Shore tourism businesses said they will need to raise prices to pay for it.

The bill gives seasonal businesses more time to get up to speed than their year-round counterparts. And its supporters say it will give teens in particular more money to, say, help struggling parents or pay for soaring tuition costs.

But the Shore's tourism business owners said the looming minimum wage hike would put added pressure on their expenses, not only for the entry-level workers, but also for more experienced workers who also would need a raise, just for the sake of fairness.

"Its not a question of operators making more money," said Anthony Catanoso, president of Steel Pier, an amusement park in Atlantic City. " In some cases it’s operators surviving. There’s just not enough of a margin. We struggle every year. This is just going to make it harder."

Rich Scalley of Toms River, a kite hobbyist, shows of his skills as he launches several kites as during the third annual Kites and Cones Festival will be held in Ortley Beach at Third Avenue. Peter Ackerman

Rich Scalley of Toms River, a kite hobbyist, shows of his skills as he launches several kites as during the third annual Kites and Cones Festival will be held in Ortley Beach at Third Avenue. Peter Ackerman

Rich Scalley of Toms River, a kite hobbyist, shows of his skills as he launches several kites as during the third annual Kites and Cones Festival will be held in Ortley Beach at Third Avenue. Peter Ackerman

Minimum wage heads higher, unevenly

The bill raises New Jersey's minimum wage from its current level of $8.85 an hour to $10 an hour on July 1, then to $11 an hour on Jan. 1, 2020, before rising to $15 an hour by 2024.

Seasonal businesses — defined essentially as those that make most of their revenue during the summer — have a different schedule. They need to pay at least $10.30 an hour beginning Jan. 1, 2020 and then increase wages each year until they reach $15 an hour in 2026, said Lauren Topelsohn, an employment attorney with Mandelbaum Salsburg in Roseland.

Many tourism business owners balked, noting that they historically have provided entry-level jobs designed to give teens in particular basic skills that they could carry with them through their career.

And they said the exception would give them little breathing room. They still would need to pay a competitive wage to attract teens who, for instance, could find higher-paid work at a Starbucks or Dunkin' Donuts.

"They can make $1 more an hour (somewhere else), why would they work for us?" said Scott Simpson, owner of Playland's Castaway Cove, an amusement park with 300 seasonal employees in Ocean City.

Advocates, however, fought hard to include teenage workers in the bill. They said an 18-year-old ride operator, for example, should be paid the same as a 20-year-old doing the same job.

And their expenses have risen faster than their wages.

"We are way past the time where it’s feasible to work a summer job and pay tuition but we are in a place where I could work and pay for my books or miscellaneous fees,” said Nedia Morsy, lead organizer of Make the Road New Jersey, a worker advocacy group.

Barnegat Lighthouse Park was created in 1957. ItsÕ main attraction is the lighthouse, which you can climb to the lightkeepers catwalk. Besides the lighthouse people come to the park to walk, birdwatch, learn about maritime history and fish. Peter Ackerman

Barnegat Lighthouse Park was created in 1957. ItsÕ main attraction is the lighthouse, which you can climb to the lightkeepers catwalk. Besides the lighthouse people come to the park to walk, birdwatch, learn about maritime history and fish. Peter Ackerman

Barnegat Lighthouse Park was created in 1957. ItsÕ main attraction is the lighthouse, which you can climb to the lightkeepers catwalk. Besides the lighthouse people come to the park to walk, birdwatch, learn about maritime history and fish. Peter Ackerman

Barnegat Lighthouse Park was created in 1957. ItsÕ main attraction is the lighthouse, which you can climb to the lightkeepers catwalk. Besides the lighthouse people come to the park to walk, birdwatch, learn about maritime history and fish. Peter Ackerman

Barnegat Lighthouse Park was created in 1957. Itsâ€™ main attraction is the lighthouse, which you can climb to the lightkeepers catwalk. Besides the lighthouse people come to the park to walk, birdwatch, learn about maritime history and fish. Peter Ackerman

Barnegat Lighthouse Park was created in 1957. Itsâ€™ main attraction is the lighthouse, which you can climb to the lightkeepers catwalk. Besides the lighthouse people come to the park to walk, birdwatch, learn about maritime history and fish. Peter Ackerman

Barnegat Lighthouse Park was created in 1957. Itsâ€™ main attraction is the lighthouse, which you can climb to the lightkeepers catwalk. Besides the lighthouse people come to the park to walk, birdwatch, learn about maritime history and fish. Peter Ackerman

Barnegat Lighthouse Park was created in 1957. Itsâ€™ main attraction is the lighthouse, which you can climb to the lightkeepers catwalk. Besides the lighthouse people come to the park to walk, birdwatch, learn about maritime history and fish. Peter Ackerman

Barnegat Lighthouse Park was created in 1957. Itsâ€™ main attraction is the lighthouse, which you can climb to the lightkeepers catwalk. Besides the lighthouse people come to the park to walk, birdwatch, learn about maritime history and fish. Peter Ackerman

Barnegat Lighthouse Park was created in 1957. Itsâ€™ main attraction is the lighthouse, which you can climb to the lightkeepers catwalk. Besides the lighthouse people come to the park to walk, birdwatch, learn about maritime history and fish. Peter Ackerman

Barnegat Lighthouse Park was created in 1957. Itsâ€™ main attraction is the lighthouse, which you can climb to the lightkeepers catwalk. Besides the lighthouse people come to the park to walk, birdwatch, learn about maritime history and fish. Peter Ackerman

Barnegat Lighthouse Park was created in 1957. Itsâ€™ main attraction is the lighthouse, which you can climb to the lightkeepers catwalk. Besides the lighthouse people come to the park to walk, birdwatch, learn about maritime history and fish. Peter Ackerman

Barnegat Lighthouse Park was created in 1957. Itsâ€™ main attraction is the lighthouse, which you can climb to the lightkeepers catwalk. Besides the lighthouse people come to the park to walk, birdwatch, learn about maritime history and fish. Peter Ackerman

Barnegat Lighthouse Park was created in 1957. ItsÕ main attraction is the lighthouse, which you can climb to the lightkeepers catwalk. Besides the lighthouse people come to the park to walk, birdwatch, learn about maritime history and fish. Peter Ackerman

Barnegat Lighthouse Park was created in 1957. ItsÕ main attraction is the lighthouse, which you can climb to the lightkeepers catwalk. Besides the lighthouse people come to the park to walk, birdwatch, learn about maritime history and fish. Peter Ackerman

Barnegat Lighthouse Park was created in 1957. ItsÕ main attraction is the lighthouse, which you can climb to the lightkeepers catwalk. Besides the lighthouse people come to the park to walk, birdwatch, learn about maritime history and fish. Peter Ackerman

Barnegat Lighthouse Park was created in 1957. ItsÕ main attraction is the lighthouse, which you can climb to the lightkeepers catwalk. Besides the lighthouse people come to the park to walk, birdwatch, learn about maritime history and fish. Peter Ackerman

Barnegat Lighthouse Park was created in 1957. Its’ main attraction is the lighthouse, which you can climb to the lightkeepers catwalk. Besides the lighthouse people come to the park to walk, birdwatch, learn about maritime history and fish. Peter Ackerman

Barnegat Lighthouse Park was created in 1957. ItsÕ main attraction is the lighthouse, which you can climb to the lightkeepers catwalk. Besides the lighthouse people come to the park to walk, birdwatch, learn about maritime history and fish. Peter Ackerman

Barnegat Lighthouse Park was created in 1957. ItsÕ main attraction is the lighthouse, which you can climb to the lightkeepers catwalk. Besides the lighthouse people come to the park to walk, birdwatch, learn about maritime history and fish. Peter Ackerman

Barnegat Lighthouse Park was created in 1957. Its’ main attraction is the lighthouse, which you can climb to the lightkeepers catwalk. Besides the lighthouse people come to the park to walk, birdwatch, learn about maritime history and fish. Peter Ackerman

Barnegat Lighthouse Park was created in 1957. ItsÕ main attraction is the lighthouse, which you can climb to the lightkeepers catwalk. Besides the lighthouse people come to the park to walk, birdwatch, learn about maritime history and fish. Peter Ackerman

Barnegat Lighthouse Park was created in 1957. Itsâ€™ main attraction is the lighthouse, which you can climb to the lightkeepers catwalk. Besides the lighthouse people come to the park to walk, birdwatch, learn about maritime history and fish. Peter Ackerman

Barnegat Lighthouse Park was created in 1957. Itsâ€™ main attraction is the lighthouse, which you can climb to the lightkeepers catwalk. Besides the lighthouse people come to the park to walk, birdwatch, learn about maritime history and fish. Peter Ackerman

Cut staff? Raise prices? Both?

The minimum wage hike puts the tourism industry in a laboratory. The sector accounted for more than 125,000 jobs at the Shore — Atlantic, Cape May, Monmouth and Ocean counties, according to 2017 data.

The looming labor cost increase leaves business owners mulling their strategy. How much, for example, do they need to pay to attract the best workers? Can they increase prices, or will customers turn to their competitor? Should they hire fewer workers, cut hours, add automated kiosks?

"When you look at our industry you’re looking at a heavily labor-intensive industry," said Marilyn Schlossbach, who owns Langosta Lounge, a restaurant on the Asbury Park boardwalk. "We need people. That’s why we’re in this business."

"It’s a tough subject," said Holly Migliaccio, co-owner of Rook, a coffee roaster with 12 stores and nearly 200 employees. "On one hand we have these incredible employees and staff members that we want to see make enough money to live, of course. On the other hand the question is … what are you going to do? What else can I do? I have to raise my prices."

Economists don't agree on the impact. A study by the Employment Policies Institute, a research group, predicted a $15-an-hour minimum wage would cost New Jersey teens a total of 10,473 jobs during the next five years.

(For context, New Jersey last year had 114,000 workers between the ages of 16 and 19, representing about a quarter of the age group, according to the U.S. Bureau of Labor Statistics.)

Michael Reich, an economist at the University of California, Berkeley, who has studied minimum wage increases, said restaurant and tourism businesses usually raise prices by about 0.5 percent for each 10 percent increase in the minimum wage.

"Such price increases absorb the full labor cost increase," Reich said in an email. "Employee turnover will fall, reducing business costs of recruiting and retaining their workers. Past experience shows that sales and employment do not fall."

Alli O'Neill, owner of Colonial Bakery in Lavallette, says she will need to raise prices to keep up with the higher minimum wage.(Photo: Michael L. Diamond)

Colonial Bakery is celebrating its 50th year. Inside, the store had all but been taken apart for the winter. Outside, one sign read, "Thank you, see you in the spring," while another read, "We sell ice."

With a wind chill close to 0 in Lavallette on Thursday, summer seemed a million years away, but Alli O'Neill considered the road ahead.

Say her competition in Toms River raises its wages in July because it isn't a seasonal business. She wondered if she could still convince her workers to return, knowing that the answer is: unlikely.